EGoM may give no significant gas to power sector this fiscal

New Delhi: Over USD 21 billion powers plants being stranded for want of fuel notwithstanding, an Empowered Group of Ministers (EGoM) may not give any significant natural gas to the fuel-starved units till domestic production rises in 2016-17.

The EGoM headed by Defence Minister A K Antony is to meet shortly to squeeze out some gas from current year output of 105 million standard cubic meters a day for the power plants.

Official sources said things have been complicated by fall in Reliance Industries' eastern offshore KG-D6 field to just 14 mmscmd at present. It is projected to 11 mmscmd this fiscal before rising to 19 mmscmd in the first quarter of 2015 and remain at that level till 2016-17.

The fall in KG-D6 from 62 mmscmd achieved in March 2010 means 25 power plants that signed up for 29.74 mmscmd of KG-D6 get no gas.

Sources said on instructions of EGoM the Oil Ministry carried out a detailed exercise to assess additional gas available and the demand.

About 4-5 mmscmd additional gas will be available from fields of ONGC and GSPC in 2013-14. A similar additional volume may be available in the next fiscal and a further 2 mmscmd from GSPC in 2015-16.

This additional production will have to make up for fall in KG-D6 this fiscal and the next as also meet 3.8 mmscmd need of 5 newly converted fertiliser plants for whom allocation had previously been approved by the Cabinet and EGoM.

Also, 2.95 mmscmd has to be given to LPG extraction plants of GAIL and ONGC, they said, adding LPG has been given second priority after urea manufacturing units.

Moreover, there will be an additional demand of 2.17 mmscmd of gas for petrochemical plant of ONGC at Dahej. The EGoM had at the time of deciding priority of gas allocation, had taken a call that all molecules from the gas should be extracted before it is burnt as fuel. ONGC's C2/C3 plant will fits into that priority.

Sources said out of additional availability of 4-5 mmscmd in 2014-15, availability for power sector would be 2-3 mmscmd. Most of this will flow to the Dabhol power plant that had been given equal priority as fertiliser plants after its revival at a cost of Rs 13,000 crore. No KG-D6 gas flows to the plant now despite it being allocated 7 mmscmd of KG-D6 gas.

Additional availability of about 10 mmscmd during 2015-16 could be provided for the power sector, they said adding further availability of 29 mmscmd from ONGC during 2016-17 and 11 mmscmd from RIL's R-Series fields in KG-D6 block in 2017-18 would be sufficient for power and fertiliser sectors.

For the present, the power sector may be asked to consider buying more imported LNG to produce electricity.

At present, only a third of the 72 mmscmd of gas needs of the 18,713 MW gas-based power plants is being met. Another 8,000 MW capacity is almost ready for commissioning but there is no gas availability to fire the plants.

At its last meeting, EGOM rejected the proposal to snap natural gas supplies to urea plants and divert that fuel to power companies.